Source One Round Up: December 30, 2016

Here's a look at where Source One's cost reduction
 experts have been featured this week!

Sourcing a Coupon Processing Company? Here's What You Need to Know
We've all been there, prompted to visit your favorite store after receiving an awesome coupon. Even though you may not need anything, you can't let the great deal go to waste. And, in most cases the coupon results in a win-win situation. The store successfully makes money it may not have otherwise and the customer gets to take advantage of a discount. Retailers have long used this marketing tactic to entice their customers to spend more money.

The key to success?- working with the right coupon processor to ensure coupons are properly tracked to avoid money costing errors. This week, Source One Marketing Analyst Liz Skipor explains the lifecycle of coupons and provides a detailed look at the importance of sourcing a coupon processor best-fit for companies looking to incorporate coupons in their marketing strategies.

Many companies may want to "green" their supply chains, but their actual method of doing so could differ. This is because of some pretty key differences in various industries which could define any kind of action. Guitar makers are taking a closer look at their chance to improve sustainability. To continue driving value in this area, businesses can look for global sourcing solutions that help them stay efficient no matter how long and twisted their supply chain grows.

Charlie Redden to speak at convention
Who better to discuss this topics than a guitar supply chain expert? Charlie Redden of Taylor Guitars will address the TPA Supply Chain Conference in San Diego next year, as the official website stated. In a 2013 interview with Inside Supply Management Magazine, Redden expressed hope that sustainable, environmentally conscious supply chains can persuade others to follow suit as business evolves. He also said that he supports supply chain professionals who "dig deeper."

"By learning as much as possible about the parts being purchased, they may find less expensive alternatives, uncover bad business practices or network with those farther behind the supply chain that can help everyone along the way," he said.

The Gibson raid
It's hard to talk about the guitar industry's supply chain issues without mentioning specific incidents from 2011. The Department of Justice targeted guitar company Gibson over alleged violations of the Lacey Act, claiming that the manufacturer used illegal and endangered wood in some of its products.
The following year, The Hill reported that Gibson resolved the issue by agreeing to pay $350,000 in different penalties, more than the value of the material seized by the government. Gibson was not officially charged with violation of the Act, which concerns, among other things, illegal transport of natural goods, but the connection seems to at least have prompted the settlement. In addition to reducing gas emissions and other effects, a business can look to government compliance regulators to mitigate possible concerns and leave their operations in better condition.

Finding ethical wood sources
By now, it should be clear that sourcing wood ethically can help businesses demonstrate green values. Trees need to be both legally produced and sustainable, perhaps from a strong forested region, to match up with government and industry requirements.

Environmental news site EarthFix spoke to Steve McMinn, a supplier who works with guitar manufacturers. He recommended against sourcing wood from tropical locations, which could be subject to poaching and thefts, although these problems also appear in other regions.

There's another factor which will determine whether a guitar maker chooses a certain source: "figure." This, according to the article, is the shape of the grain on the wood, which can dramatically change its worth.

In the end, it's not hard to imagine a major guitar brand wanting the best in ethics, sustainability and figure type all in a single source. Since it can take a long time for trees to mature, it's difficult to wait too long for any particular development.

Strategic sourcing is one approach to the supply chain that will help guitar makers switch tactics without losing any value. Smart solutions are necessary when a company has several different goals to meet at once.
It's always interesting to look back at the end of the year to see how our experience with clients lines up with some of the trends that were predicted for the year. Generally -and not surprisingly- we see planning and technology adoptions that align well with many of the forecasts. What's perhaps more interesting is to observe where the most momentum is building so I've chosen three areas that I expect will continue rapid growth throughout 2017: Software-defined Wide Area Networking (SDWAN), carrier cloud connected services, and managed security services. Like most trends in the telecommunications world, we tend to hear about them for some time before we see them practically applied in the field in a significant way. All three of these areas have gained significant traction by small businesses and large, multi-national corporations alike so if they're not priorities on your road map today, you may find they're worth reconsidering.

Software-define Networking (SDN) and SDWAN technologies have been emerging for some time now and along with that, some new players have successfully entered the market. In parallel the larger ILECs and CLECs have matured their offerings, making it a bit easier for uncertain customers to dip their toes in the water. Over the last year we've seen customers who have leveraged simple provisional builds via a few broadband connections and technologies like Cisco's Meraki while their awaiting their MPLS circuit delivery to customers who have ripped out and replaced their MPLS networks with Aryaka's SDWAN solution. Most commonly, we're seeing clients experimenting with SDWAN links a backup or for low priority locations both to save money and increase overall bandwidth capacity. No matter how it's deployed, similar historical trends (SIP, Cloud Services, etc.) and carrier and new player investment indicate the SDWAN is going to accelerate in its growth in 2017 and beyond.

The Cloud, as vague a term as it is, has been around for a while. And companies have been moving more of their applications, services, storage, etc. to the Cloud for some time. In doing so, these companies have also created a requirement to establish and manage connections to these third party providers, which is cumbersome at best. The carriers' answer to this challenge has been to provide connectivity to third party service providers directly through their MPLS networks. So, for example, rather than having to maintain connectivity for Amazon Web Services (AWS), the carrier can weave it directly into their cloud eliminate the need to be concerned with connecting directly to Amazon ever again. This trend has been interesting to watch. Demand and adoption of third party Cloud services has risen in recent years, the carriers have reached a tipping point in terms of providing this built-in connectivity and so the shift from adoption to management to integration into the WAN is now gaining velocity and will continue to do so as the carriers bring on more and more partners, making their solution even more appealing.

Cybersecurity is a term that's rang loud and clear throughout 2016 in both business and consumer markets. From reports of over a million cybersecurity jobs being available in the U.S. in 2016 to high profile retail, insurance, banking breaches, to the U.S. Presidential Campaign, concerns for cybersecurity has entered our daily lives. So, as you can imagine the demand for cybersecurity services has grown dramatically and will continue to grow. Both specialized firms and carriers alike have entire portfolios to support the need for increased security measures, no matter the industry the customer operates within. The reason many are looking to the carriers is simple: they own the networks. The carriers have a unique perspective and a tremendous amount of experience and data to help enterprises better manage their own security. Most organizations cannot justify bringing in and maintaining the level of security needed to ensure company and customer data are secure. As the quantity and sophistication of cyber attacks increase, the demand for third party support will as well. Keep an eye on the carriers and their qualifications in 2017 as they are bolstering their offerings to grab a slice of the pie in this growing industry.
All industries with complex supply chains may learn something from watching Apple in the coming year. The electronics giant has such a large international presence that it's hard not to notice its movements and plans. The company may not be without challenges, but even its potential missteps could be enlightening for other businesses.

With a specific focus on overseas efforts, let's look at the actions Apple is committing to which could have a wide impact in the future - and that could also point to other technological trends that may drive business as a whole:

1. Green energy

Many have come out in support of a more energy-efficient approach to the future, and Apple appears to be no different. Quartz recently reported that the company would invest in multiple entities owned by a wind turbine manufacturer in China.

As the source said, this has an impact on the company's image within the country, since China remains an important consumer hub, while also signaling an attempt to work with the larger concerns of global conservation.

The source further said that the wind power would eventually benefit the company's own supply chain, and the resources will one day produce "285 megawatts of clean energy." Following this, we can assume that Apple's interest in clean energy may persist in the coming year, at least.

2. Further manufacturing presence in Asia...perhaps in India?

China isn't the only Asian country Apple could continue to work with. The Wall Street Journal reported that it may manufacture products in India and could be currently working toward a deal for this with the Indian government.

However, this seems to be more of a matter of speculation and deduction than pure fact, since Apple did not comment and Tim Cook, the company's CEO, openly said that there were no plans to start producing in the country earlier this year.

Forbes contributor Tim Worstall also pointed out that most of the benefit would go to Apple, with the Indian economy itself not gaining too much from the company's presence there. This sits in contrast to Apple's work in China, which also benefits the country in addition to the business' sales themselves.

3. New devices

Along with its existing products, observers may want to pay attention to Apple's newer entries. CNET reported on some of these possibilities, including a new Apple Watch and even a product to eventually compete with Google Glass. The article implied that the former is more likely, since the glasses project is still in development and would not be a standalone device, but an extension of the iPhone.

Likewise, the newer version of the Apple Watch could still be some time coming, but Apple at least seems to be considering a new design, with a round face and possible enhanced capabilities for using the watch on its own. Since Apple has often presented itself as forward-thinking, the appearance of some innovations seems likely, even if they are on the quiet side or take a back seat to mainstream products.

Implement strategic sourcing solutions for a step toward the future of the supply chain, and a way to keep up with the pace of modern industry.
Livestock transportation can add a wrinkle to supply chains, but all industries are facing the need to modernize, stay current and integrate data into their operations. A few recent stories about the cattle farming industry show one particular type of business dealing with potentially volatile changes.

When shipping cattle, companies need to be aware of the animals' condition, as well as attention from regulators and the trajectory of revenue.
Before we look at the supply and logistics side specifically, we can observe the way online auctions and future trades are used to propel the industry. The Wall Street Journal recently wrote about the way online cattle auctions have boosted the share of cattle sales by 5 percent between November 2015 and 2016. Online exchanges could be a useful tool for keeping auctions live, even if it goes against the standard way some operators proceed, the source said.

Regardless, it's one sign of the cattle industry looking to real-time solutions, much like other sectors. And just as with any form of goods shipping, there are data points which could influence major changes.

Certification and specification

Information on possible cattle measures recently appeared in The Professional Animal Scientist. Karen Schwartzkopf-Genswein, who headed a recent study on animal transportation certification for meeting best practices, discussed some of these issues.
One takeaway is the way many different factors in transportation need to connect for smarter, informed delivery. This includes the condition of the trailer as well as the animal's well-being, the driver's level of education and other elements. Building off of these observations, it's not hard to see the opportunity for data monitoring on some of these particular points.

"Every stakeholder has an expectation for fostering animal well-being," Schwartzkopf-Genswein said. "Producers, consignors, packers and retailers alike want to improve animal treatment during transportation."

Later in the same piece, she also added that "a driver's cattle transporting experience is significant in the success of cattle transportation, which makes training and education important." This again adds to the idea that different sections within the business are connected.

Getting smarter about cattle supply

With different regulations governing what can and can't be done in transport, overseers have a lot of different pain points to pay attention to. The Canadian Cattlemen magazine also looked into this topic, describing the results of audits from the Canadian Feedlot Animal Care Assessment Program and their impact on suppliers. The source mentioned both the condition of the transporter and the cattle itself as important indicators that auditors will focus on.

Both of these areas could require companies to look carefully at their infrastructure. For example, if the problem lies with the transporter, businesses may have to correct the amount of space available. Issues with the cattle, on the other hand, can also affect efficiency, since a cow with injuries or health problems could slow down the rate of transport, as well as violating standards.

To hit important benchmarks and fulfill standards, global sourcing can be a vital resource. All industries may have their own concerns, but strategic planning can be a benefit to all.
It's not uncommon to see predictions at the end of any year. What's interesting about the future of supply chains, though, is that prediction may be the order of the day for some time to come, as AI and smart systems become more of a commonplace. Strategic shifting of logistics systems is a key part of this, as businesses select the locations and facilities that best suit them.

The Wall Street Journal reported on the plans that The Merck Group, also known as Merck KGaA, has for its own future processes. The company wants to increasingly adapt to the digital space with demand processing, real-time supply chains measures and other enhanced systems.

Using artificial intelligence, the systems within the supply chain could self-regulate, potentially reducing the time it would take for the business to keep up. However, the source did specifically clarify that the company would predict demand, not revenue, showing a limit as to what the new tech would effectively do.

There are a few ways businesses would benefit from more predictive solutions, as the following list will show.

Planning long-term

With software options that look to the future, it seems natural that companies would get in a broader frame of mind. As a Supply Chain Digital piece recently stated, there is a bit of a paradox at work here.

While the use of predictive analytics will have lots of value in the short-term, allowing companies to react more quickly, it's the bigger picture that will show the greatest use of predictive technology. Retailers in particular can use insights to prepare for both major future demand and immediate changes.

New delivery methods

In as little as three years, a new dynamic shift could see companies increasingly targeting the consumer for better satisfaction. In a recent abstract, IDC Manufacturing Insights Global Supply Chain Strategies VP Simon Ellis said that there will be some possibility for changes as soon as next year.

"While the predictions offered here largely focus on the near term to midterm (2017–2020), the impact of many of these will be felt for years to come," Ellis said. "It is worthwhile to note that predictions are not finite but rather occur on a continuum of change within the wider ecosystem of the manufacturing industry and global economy."

New software can also match hardware and vehicles designed to make smoother deliveries.

Thinking smaller

Having the greatest impact could require companies to focus on local solutions to reach all customers. Combining this with the predictive mode could mean more data points for analysis and a more robust list of points to draw from for making meaningful predictions.

As a Supply Chain Quarterly piece on IDC's predictions noted, the scope of what manufacturers focus on could change as well, narrowing down from the way items are stacked in warehouses to the specific objects themselves. This granular approach could, in turn, be a call for smarter global sourcing to improve logistics.

Invest in options for the future of the supply chain that is perfect for both the tech you plan to use and the new approach to managing complicated networks.
It has been quite an exciting here for us at Source One!

We've enjoyed the launch of our Spend Analysis as service web-based application, www.SpendConsultant.com, shared supply management best practices at a number of industry conferences, and partnered with the Institute for Supply Management as the exclusive sponsor of the ISM Annual Conference executive event, Exec In - just to name a few of the highlights!

Take a look at our 2016 Year in Review for a more detailed look at all 2016 brought our cost reduction team! Thank you to our incredible team, partners, and clients who have made this year one for Source One's record books! We're looking forward to continuing our commitment to providing innovative cost reduction and supply optimization solutions for our clients in the new year!

Rebuilding American infrastructure has been a major theme in the news recently, as more and more people realize the need for better roads. However, the exact way this will play out isn't entirely clear. Not surprisingly, the future of logistics, especially trucking, could feel the effects of key projects that affect roadways, bridges and other structures.

In a recent Harvard Business Review interview, Harvard University finance lecturer John Macomber denied that a spending crisis for infrastructure exists, instead saying that the future of any infrastructure attempt will hinge on the country's larger goals and locations, also defining the key ways in which we need to envision a rebuilding program for it to work."We should be thinking about infrastructure as a long-term investment in competitiveness and quality of life, not as a spending program," Macomber said. "We should be selecting projects based on objective characteristics that benefit the most people at the optimum benefit/cost ratio, not as a way to spread money to all congressional districts." There's also the concern that re-established roads could offer truckers an immediate gain.

Focus on Rhode Island

It may not come up in many national discussions, but the state of Rhode Island has one example of a local plan to reinvent some of its infrastructure. The state's Department of Transportation recently announced a plan to replace the 6/10 Interchange, following initiative overseen by Governor Gina Raimondo.

This improvement plan will reportedly cost $400 million and include visual improvements, greenspace and new links between neighborhoods. The measure seems designed to increase both local transportation on foot and bicycle as well as the use of vehicles. This may be just one small example of state improvement, but others could follow after it in an attempt to make serious changes.

A logistics solution for the road

With changes possibly coming to the roads themselves, a viable, evolving business model makes more sense than ever. Just as supply chains themselves are changing, some of the means companies are using to manage shipping seem to be changing as well. The many different technologies set to disrupt this space include automated vehicles, drones and even a new model for logistics itself as an extension of a famous brand.

The last point applies specifically to Amazon, which is reportedly developing a trucking system that could connect different drivers with payloads. It fits into the sense of "Uberizing" shipping behind the scenes, and, as Fortune pointed out, it could be the beginning of a shift within Amazon, as the company prepares to externalize its own shipping. If this does happen, could it point to a new way for major companies to develop shipping arms that benefit from new technology?

Both the focus on better roads and the focus on better means of shipping hinge on an idea of adapting to the world around us. By that same token, global sourcing can free up companies to make choices that match their supply chain's increasing complexities.
To prepare for changes in the supply chain, we're accustomed to imagining the future. But how far ahead should we be looking? Forbes recently listed some of the ways traditional job titles are set to transform under a digitally altered approach to logistics as far ahead as 2025. Thinking about this can help businesses visualize supplier relationship management and other important factors as the roles governing different actions evolve.

These changes can hammer home just how thorough new supply chain realities are. For example, the source suggested that resource management could become a broader title that represents the next step for sustainability concerns. The source also said that knowing the ultimate commercial impact of a change will also be a serious boon for companies that need to go beyond simply anticipating demand.

For companies struggling to keep up with current trends, these long?-term predictions could seem abstract. Still, it's interesting to remember the role of the individual, especially as businesses look for more technology to add to their facilities. This all falls in line with making strong choices for companies based on efficiency. Talent will have to parallel the concerns of each company, even as those start to shift.

Job loss and automation
One of the big concerns of the use of automation is its impact on jobs. Is the need to upgrade going to cost the workforce? Some may think so, but the overall impact could be more complicated. In a recent talk with The Wall Street Journal, UPS CIO Juan Perez said that the company is both interested in retaining jobs and making "everything" within its company autonomous.

Perez said that the new focus of the company will help meet customer satisfaction, a priority that the Forbes piece also said would come to the forefront in the coming years.

"We now have a generation of customers that are connected continuously through their mobile phones and on their personal computers," he said. "We want to be able to give them a channel by which they can converse with UPS and get answers to their questions very quickly using AI."

Sooner than later
Global Trade Magazine makes the case that automated vehicles could cause major changes to supply chains sooner than later, perhaps even next year. That prediction specifically comes from CEO Elon Musk, but the article also had a list of similar forecasts that all play out over the next few years: the longest-reaching of these is Ford's, which said that vehicle automation will arise as soon as 2021.
However, even though drone deliveries seem to be more accessible now, as the source pointed out, the Internet of Things concept has existed for years. Eventually, supply chain automation could impact the entire supply chain with each piece incorporating some sort of technology.

It's worth noting that just because advances are thought of doesn't mean they will be implemented. It takes strategic planning to make new changes take hold, including drawing from supply chain data before improvements are made. Spend management and other tasks stem from a specific plan that matches the government.
This blog post is brought to us by MRA Global Sourcing.

Effective management teams strive to be as authentic and transparent as possible and avoid doing one thing and saying or meaning another at all costs.  By ensuring your company isn’t sending mixed signals, especially during the hiring and recruiting process, you prevent talented candidates from having a negative first impression about your organization’s brand and values. It’s important to be aware during this introduction period of ways you could unintentionally send conflicting messages that would turn away potential employees.

Ultimately, you want the interview process to reveal if there is a mutual fit between both the candidate and hiring company. Candidates seek tangible insight during interviews, such as how the employer responds to specific questions, inconsistencies between interviewers, and details of the position that are emphasized compared to those that are discounted. For the company, their focus is more about the personal details of the candidate, how they would fit in the company’s culture and the type of impression they leave. The interviewer is already aware the candidate has a majority of the required skills necessary to fill the role and uses the meeting as an opportunity to gain an idea of how they can fit into the company beyond their position.

While the executive, managerial and professional labor market continue to be candidate-driven, it’s important for employers to consider the crucial first impression they leave on prospective employees. “Businesses need to think about the interview process as a key player in their strategy for communicating their brand and company culture,” advises says Naseem Malik, Managing Partner of MRA Global. “With sites like Glassdoor, it’s easier for applicants to share their experiences with other prospects, and organizations have to ensure that those responses mirror the way they conduct business.”

Review your organization’s hiring practices and consider these four common mistakes that might contradict your mission, values, and business goals. 

1.  Don’t claim your company is cutting-edge during an interview

Even with a progressive reputation, an unorganized, rocky interview process will be fast to give candidates the opposite idea about your company. It’s important to revise the interviewing process to meet the needs of today’s applicant pool. While one-on-one interviews are traditional, they might not get to the bottom line of how the candidate can be valuable to your company. Team interviews that have candidates participate in brainstorming or planning meetings can be more insightful for details of the applicant’s personality beyond what their resume reveals and in turn is more efficient for your organization.

2. Take caution in hiring for new roles with responsibilities that clash

The needs of every organization can vary, but combining them all into one role can hinder the productivity of the employee responsible for filling the position. Creating new positions can benefit your company, but Recruiterbox claims that this is a common mistake for that process, and while it is normal for employees to have multiple responsibilities, it’s crucial these don’t require them to be unfocused in their role by trying to juggle too many different tasks.

3.       If your company values speed, be efficient in bringing on new talent

There is a snowball effect on the rest of the company when hiring managers elongate the process and fail to replace roles in an efficient time frame. Other employees can be unhappy with management and waiting too long to hire can have a negative effect on your company culture and revenue. It’s a turn off for top talent to see a company that doesn’t seem eager to have them on-board and can give them an impression that management is unorganized. It’ll prove beneficial to begin seeking talent even before the position is empty.

4. Value your company brand without lacking on recruiting

Be careful about revealing details that seem minor but could lead to a negative interpretation of your company. This includes contacting candidates when you tell them you will, not months later, and staying in touch with an applicant to make sure they know where they stand. Ensure candidates know you value their time and talent. On the other hand, if you are having trouble recruiting to begin with, consider partnering with a recruitment firm to gain access to strong candidates in your industry.

Every organization has a unique approach to the interviewing process that fits the needs of their company, but regardless the process should leave candidates feeling the experience was a positive one. “Ensure your hiring team is on the same page and implement efficient practices to reduce the chance of being unorganized in communicating with candidates that’s damaging to the company’s brand,” Malik says, "this way, the interview can be more than just a method of qualifying new hires, but also an opportunity to showcase your organization as a quality workplace."
Flexibility, agility and intelligence: You've likely heard all these words spoken in context with the future of logistics. However, there's still a chance for businesses to be confused over how to truly innovate their supply chains for a more collaborative future.

In general, creating a dynamic, evolving supply system will probably mean faster course correction for efficiency. Given these desires, it's not hard to see a greater demand for low-cost country sourcing/nearshoring when businesses want to massively upend their approach to production.

Manufacturing Global outlined a few of the key factors driving the need for "dynamism" as organizations come to understand what that really means: geography, cost-effectiveness and technology. Let's take a closer look at each of these by drawing information from other sources:

Flexibility in a more flexible world
When the boundaries of countries are malleable, businesses that work across these boundaries have to be as well. CSCMP's Supply Chain Quarterly recently spoke to Yemisi Bolumole, lead author of a study on governance in different regional "logistics hubs."

Bolumole told the source that economic development could be a "win-win" for companies and the public sector alike, also calling for a direct link between supply chains and powerful economic incentives to support the future, as opposed to tax-based ones.

"What we are hoping is that economic agencies can redefine what economic development means in a way that allows them to align what they do not, only with the firms that are represented, but also with the distinct supply chain assets that they possess," Bolumole said. "In other words, supply chain or logistics hubs become a major stimulant to economic development."

Saving money the smart way
While the above point did mention business efficiency, there's also the added benefits that could come from simply reorganizing the supply chain. This idea goes back at least as far as 2011, when an excerpt from the book Supply Chain Secrets appeared in a different Supply Chain Quarterly piece.

This source said that succeeding with supply chain design comes in part from taking an accurate look at the entire supply network's performance. As nearshoring or relocating becomes more attractive, businesses may also consider why they've been tempted to outsource jobs in the past to begin with: the book suggested that it could come from a sense that a certain aspect of the company isn't essential or an investment isn't worth direct action. In addition, true financial benefit can come when the supply chain gets simpler and has fewer moving parts to worry about.

Many technologies, one goal
Finally, it's worth noting that many of the new tech offerings targeting the logistics sector have the same goal: These services are meant to increase efficiency and save costs, even if they all come at it from different angles, such as automation, shipment tracking and warehouse management.
With data at the cornerstone of so many innovations, the increasing ways to utilize it will undoubtedly encourage businesses to be better about changing their existing processes. All of these factors are important different elements of the supply-focused future.

Establishing a strong supply chain can put a business into a comfortable lead in their field. For smaller and newer businesses, this could be a more daunting task, since the way forward might not seem entirely clear. One of the worst things a startup can do, though, is to simply ignore certain strategies or treat them like they don't matter.

Investing wisely early on sets up the procurement transformation for better success. To get ready for this, here are a few important points to remember:
  1. Discover trustworthy partners: Outsourcing can represent a way to get desired results, but only if the other company meets your standards. Whatever the connection, they will likely require strong supplier relationship management to coordinate all of the major actions needed to master a complex chain. Researching the company involved in outsourcing will inform the process as you commit to a new business setup for what could be a long-term engagement.
  2. Never stop monitoring: From the very beginning, your company can prepare to grow by using audits to assess potential problems. The key to improvement is not to give up, and to build it into procurement as an expectation. Placing this at the beginning will make it a regular part of the procurement and logistics side of the business. It will also set the precedent and focus on data for better knowledge of each sector. 
  3. Roadmaps will help: Ideally, transformation will come with a detailed plan for achieving specific tech goals. In addition to a timeline, this sort of layout should also include a look at the specific cost benefits of the new strategy. Both employees and the tools they use can function better if a strategy dictates the proper development.
  4. Tie it all to your larger business model: What is your largest source of revenue, and where are most of your orders coming from? Questions like this can dictate how you think of the supply chain, and which sources you work with. Online and ecommerce purchases are a major part of the modern consumer landscape, putting an emphasis on a tight, responsive chain. At the early stages, the business might be small enough that it can plan these efficiently, using the relatively small size of the business as an advantage. It's worth thinking of this in the positive rather than the negative.
  5. Understand the different vehicles needed: Depending on the timing and necessary routes, a company may have to work with current traffic conditions and other demands. The Wall Street Journal reported on the heavy volume of truck and rail traffic seen during this fall. October 2016 was shown to be a major month for retailer activity between different types of vehicles, making an already busy quarter of the year potentially more fraught.
Most of these tips aren't just important for startups: they will also serve the company well as it gains more industry presence. In any case, saving money at the outset could also be a good move for the future, leaving the business with more capital and the relationships they need to prosper.

Coming into my internship at Source One Management Services this past fall, I felt both apprehensive and enthusiastic. Entering a new profession can be stimulating and I was eager to learn as much as possible about strategic sourcing and procurement. I remained slightly nervous because after graduating with a chemical research background, this would be my first practical experience in a business setting. Even though I had scoured the company website and memorized what my expected tasks would be in the analyst internship position, I still couldn’t picture what an average day’s work would look like.

Though I was mistaken in my assumptions about the workload, I was certainly correct about not being able to picture an average day at work. I never have to worry about being without an assignment, because there is always a project that someone needs my help with. My first few weeks with Source One consisted of mainly data entry and cleansing which proved to be some of my most valuable training because even though I mastered the tasks relatively quickly, it gave me a solid understanding of how the company operates. I learned the list of services we offer to clients, what subject matter experts are included in the Source One team, and what the sourcing process looks like from a hands-on point of view. Additionally, as part of my training, I completed readings from Managing Indirect Spend, written by members of our management team, which has given me a strong foundation in procurement and supply-chain management.

As I gained more experience, I was given progressively more analytical assignments that spread over a number of different industries. My projects have ranged from researching landscaping companies to benchmarking different marketing firms to executing company wide database overhauls for internal systems. I have particularly enjoyed doing auditing work for a company that supplies natural resources. As I graduated with a major in economics and a minor in chemistry, these assignments especially allowed me to merge my interests and gave me a deeper understanding of how I am contributing to impact everyday business.

In essence, it was the perfect transition from the classroom to the workplace.

The Source One workplace environment is open in both a literal and figurative sense, and the company culture fosters employee growth. Everyone from the director to the project analyst level know each other by name and is willing to answer the phone if even someone like myself, in an intern position, has questions. Source One has also hosted a variety of social events such as a Thanksgiving party, ping pong tournament, and industry happy hour which have reinforced the amicable and collaborative atmosphere.

Initially, I had hoped to gain some practical business experience, but I never expected to receive such a diverse breadth of exposure! In the future I hope to continue learning about new fields and eventually hone in on a few to master. Up until now I have particularly enjoyed working with direct spend, because it takes advantage of my economic based studies, and IT/Telecom, because it is a very forward-looking field. Based on my experience at Source One, I plan to continue a career in consulting so that I can continue to use fundamental knowledge and analytical skillsets to change the way people do business. 

Shopping online may be common enough culturally that most consumers don't even think of it on the surface. For retailers, the move to ecommerce is an important one, with possible repercussions for how businesses take advantage of current technology. Back in June, the United States Census Bureau released statistics on the rise in the "electronic economy" as of 2014.

According to this brief, the total amount of electronic sales for retailers in the U.S. in 2014 grew by more than 14 percent over the previous year, equaling $298.6 billion. While they only made up 6.4 percent of the amassed retail sales for the year, it did make an impact in multiple different sectors as well.

The manufacturing, wholesale trade, retail trade and selected service industries all saw the percentage of ecommerce that made up their entire sales increase, even if it was by less than a full percentage point. Of these, manufacturing saw the biggest improvement, with ecommerce growing to account for 60.9 percent of it in 2014.

For companies in these different fields, the spike in online orders may disrupt shipping and logistics processes. Brands that bank on in-person transactions might need to adjust to take these new statistics seriously and create a new strategy. This could push some of the biggest names in certain spaces to approach ecommerce with a new lens.

Costco adapts
This month, Fortune reported on Costco, which has traditionally fallen behind when it comes to online sales. To counter this, the company is taking new measures to appeal to online buyers, specifically revamping its website for a better experience and adding shipment tracking to help entice customers. The changes are poised to not just impact the customer side, but the distribution centers and other elements which drive basic shipping on the company's end.

Fortune also featured comments from Richard Galanti, Costco's CFO, who referenced the company's slow path to change in a conference call."We're clearly taking the offense," Galanti said. "Again there are some things that perhaps we should've done earlier but we're already seeing some improvement," he also stated.

However, Galanti showed some restraint in his vision of what the future looks like for Costco, with a more realistic plan instead of a drive to be a completely online store.

This could be an important model, since it shows that businesses don't have to become completely digital to still take advantage of the new dynamic. Either way, embracing strategic sourcing can add options to a company in need of new, efficient ideas for finding supply chain solutions.

Strength in the third quarter
The Department of Commerce's figures for 2016 also show an increase. A Nov. 17 statement said that this quarter saw retail ecommerce sales increase by 4 percent from the middle of the year, when adjusted for seasonal variation.

What's more, the source mapped out the trend of quarterly retail ecommerce percentages over the years and saw a general trend upward, even when not adjusted, steadily heading toward 9 percent of the total and perhaps higher.

To build a new, well-crafted supply chain, businesses can use purchasing management to help control their actions.
Every holiday season represents a potentially stressful time for shipping and logistics. This year, major delivery and postal service companies are once again competing to meet critical deadlines, putting the importance of proper strategic sourcing front and center. To survive during this frantic season, businesses have to be smart about the problems they face.

In some cases, these following issues are merely an evolution of problems seen during the year. The holiday crunch, though, can increase pressure even more, making normal concerns all the more pressing. When companies find these things impacting their performance, the right thing to do is to plan efficiently to work around setbacks.

1. Prolonged delays
Apple is dealing with this at the moment, with its much-touted wireless headphones facing shortened shipping times. As Ars Technica described, the AirPods, set to parallel the launch of the iPhone 7, were originally set for a release in October.

While the resulting delay didn't totally prevent customers from ordering these headphones in time for Christmas, they did add a cumbersome four weeks of shipping to make on-time delivery difficult. Whatever caused this setback, the company now has to contend with possible disruptions and potentially upset customers.

A business as large as Apple could arguably recover easily, but for smaller retailers, effectively taking a major new product out of the holiday shipping season could leave a serious dent in expected plans.

2. Customer conflict
Building off of that last point, we can see the type of problems that lead to angry, uncomfortable customers who feel like they have a right to better service. Heightened language and threats from buyers could add to the intensity of the shipping season and place businesses on a needless defensive.

As a response to this, a Practical e-Commerce piece recommended "letting bad customers go" to increase a business' security. According to this article, angry clients could be belligerent, threatening and even abusive as they make demands from a company they feel entitled to. When several difficult customers make similar demands at once, the results could be magnified. It's also important to watch customers who might be abusing company policies.

3. Overwhelming orders
One of the most obvious dangers of the holiday season comes from unusually high shipping volumes, putting a strain on standard resources. The Wall Street Journal reported that FedEx is, in some cases, devoting extra hours to address the larger call for business this year.

Over the years, FedEx and UPS have undoubtedly learned of the overwhelming importance that comes with smooth functioning during the holidays. A September article from the same source said that new techniques, such as automation, temporary sorting hubs and software for faster sorting were all being used to enhance existing systems.

Ahead of difficult periods, software could also help companies by offering advanced training. Back in September, the Journal said that UPS had employed more than 95,000 seasonal workers for two years.

Improving supplier relationship management matters before the holidays, and it can have an even larger impact during them. Implementing strong, sustainable policies along these lines can mean businesses are prepared for all of the above issues and more come this holiday season.
We've discussed the benefits of integrating software into logistics, but there are other ways that data and trucking can work together. Data may dwell in the cloud, but it also requires physical storage centers and servers to support modern transactions. Amazon has a plan which could build on this, with a physical transport that will also move data to Amazon's Web Services. Called the Snowmobile, this truck can reportedly secure as much as 100 petabytes of data in a 45-foot container.

What's intriguing about this model is the way it combines standard shipping with the new promises of the cloud. According to the official Amazon blog, migrating data directly to the cloud can be time-consuming.

The Snowmobile would start by "filling up" with data, almost like an oil tanker, before making the trek to the Web Service itself. A single Snowmobile can reportedly import data over the course of 10 days, transferring data at a rate of 1 terabyte per second. The goal is to simplify logistics for the possibly daunting prospect of the mainframe update, and given Amazon's presence in tech, it's possible to see this as a trendsetter for other similar-minded businesses.

Related concerns
To see this model truly take off, though, Snowmobile and other projects will have to answer certain fundamental questions. Although Amazon still has yet to reveal more information about this process, there are some important things to ask early on to help companies determine if this is right for them:
  • Who will benefit? As Bloomberg's commentary recently pointed out, this service is really only beneficial for a specific subsection of businesses, at least for now. The ideal client will have enough data storage needs to demand this kind of high-level transport in the first place. Amazon also clarified that "this is not a self-serve product," meaning that it would involve working with Amazon specifically and slowly from initial consulting to uploading to shipping and migration. 
  • What will the cost be? As of this writing, the company had not released an official pricing plan. However, Bloomberg said the Snowmobile storage would cost $.005 per gigabyte per month. Since a petabyte equals 1 million gigabytes, just 1 percent of the Snowmobille's storage could cost $5,000 every month, according to these figures. While it's useful to examine this pricing beforehand, we also need to prepare for the actual rates to shift once it becomes common, if it indeed does. Again, the companies that need this service in the first place may already be more likely to use it.
  • How will the shipments be secured? This is a significant issue, with all forms of shipments facing threats during transit. Amazon says that the truck will be reinforced, but logistics operations face digital threats as well as physical ones. To stay truly ahead of the curve, businesses will have to be ready to evolve to meet new standards.
Managed IT services are important to address both the present and the future of shipping. Connected systems will likely demand more and more data, which could put emphasis on services like this.
This year has been a difficult one for the marketing agency world and it does not appear it will be end any easier.

Back in June, K2 Intelligence published the results of their investigation of media agencies, detailing the pervasiveness of cash rebates and other “non-transparent practices”. And now, early last week it was announced that certain advertising agencies were being investigated by the Justice Department for allegedly rigging the bidding process for production work to ensure their in-house teams were awarded the business.

The marketing agency landscape consists of both large advertising agencies and smaller, specialized shops, which are oftentimes owned by a holding company. According to the 2016 AdAge Agency Family Tree, the four largest agency holding companies are WPP, Omnicom Group, Publicis Groupe, and Interpublic Group of Cos., each with a network of agencies underneath them. It is these holding companies that are the center of the DOJ investigation.

In recent years there has been a growing trend towards using more specialized shops for services, rather than the large advertising agency. Decoupling, the carving out of production from creative services, has led to an increased number of independent production houses, who are now a more prominent competitor to agency holding companies than ever before. One of the key reasons why marketers decouple agency services is because advertising agencies frequently utilize third parties to supplement services where they do not have the capabilities or expertise. In an earlier post, we discussed how these large agencies are adapting to a changing marketing landscape by acquiring these independent agencies to capitalize on this trend and bolster their expertise in these production services; however, agencies must still compete with production shops to be awarded this business.

For marketers who have not decoupled production services, it is a standard practice for the agency to bid out these jobs to a number of production shops to ensure they are getting competitive pricing for their clients. Typically, that agency's production houses or in-house shops that fall under their agency network is included in the bidding process. The DOJ’s investigation is focusing on whether or not agencies and in-house shops are purposefully undercutting or influencing the pricing proposed by other production shops to ensure they are given the business. Independent firms have come forward stating that they were approached by agencies to inflate their bids under the promise/threat of receiving future business or agreed to provide “check bids” in order to meet bidding requirements. Additionally, following the announcement of the investigation, K2 revealed that during their investigation into media agencies they found similar instances of bid-rigging with creative agencies.

The advertising world has a lot to recover from after the scrutiny brought on by K2’s report, it will be interesting to see how this most recent investigation will impact the landscape in 2017.

To improve their supply chain continuity, companies can always count on data and reporting to point out key factors. For data to make the best impact, though, a business may need to be vigilant enough to examine it in the first place. Business Continuity Institute and Zurich Insurance Group recently released their 2016 Supply Chain Resilience Report on the way current supply chains operate.

RetailWeek cited the highlights of the report, which show a possibly alarming lack of awareness when it comes to disruptions. According to this source, the report found that two out of five companies do not analyze the full cause of supply chain disruptions.

Furthermore, two out of three of these companies don't maintain complete visibility of the supply chain, a possible sign of further issues to come. Despite a recent concern with hacking and online breaches, this report found that the largest cause of disruptions was unplanned IT and telecommunications outages, which accounted for 60 percent of the instances. Retail Week acknowledged increased risk by adding that as much as 85 percent of retailer-friendly manufacturers' product components can come from unapproved suppliers.

Given this, it's worth asking: Why are disruptions ignored? What makes it difficult to take action after problems arise?

While it's far from a comprehensive list, here are some possible factors which could prevent businesses from responding the way they'd like to after a problem arises:

1. Return on investment
In a report from DHL published earlier this year,  Hochschule Fulda University of Applied Sciences Business Administration and Logistics Professor Michael Huth said that risk is a matter of "probability" rather than binaries.

"If it changes the probability distribution of possible outcomes with suitable risk management measures, a company changes the amount of equity required to hedge possible risks, and that reduces the cost for this capital," he said.

By that logic, we can assume that a business that sees low ROI to a measure might not choose to pursue it.

2. Structural issues
The growing nature of risk means that companies have to adapt. As a Forbes piece recently argued, changes in conditions could leave businesses unsure of how to function. If businesses simply aren't used to operating in a high-risk environment, they might not know that they're ignoring the right steps to improvement. Establishing a flexible structure can be important for responding when risks are more prominent.

3. Lack of continuity
IT systems should be not just be up-to-date but also in sync with each other, the source also stated. In a grander sense, resilience can mean shared information that contributes to a stronger network. Continuity can be a big term, and include not just new technology but business practices which support it.

The goal should be communication and a clear set of principles throughout the supply chain. Following this, businesses might find themselves implementing better changes if they have consistent tools at the ready.

With better strategic sourcing methods, supply chain businesses might find a way to take risk more seriously. If further disruptions arise, the company has to be in a position where it can use new data to stay efficient.
Nowadays, technological innovations happen much faster than it ever had. Indeed, it took only a decade for a big portion of the world’s population to have internet in its pocket. And if you were born in the late 80’s like me, you probably remember the first “mobile phones” from Motorola or Nokia: nothing to compare to today’s smartphones. This innovation pace has also its impact on the industry! These technological innovations that we see in our everyday life found also their ways in factories, offices, trucks, ships, planes, and is completely reshaping the way business is conducted. While it enable companies to be much more efficient than it was just 10 years ago, it also opens everyone’s eyes on “what could be achieved but that is not in place yet”, resulting in new customer expectations to which each need to adapt. The Internet of Things, for example, fall into these innovations with tremendous potential to reshape our world on many facets and areas, supply chain included.

Before to look into how IoT could impact the supply chain industry, let’s take a look at what IoT is exactly. IoT is mostly known today through revolutionary products that 10 years ago would be a good candidate for a sci-fi movie, such as the concept of “smart home” devices. How does it work? First of all, let’s take a look at what is exactly a smart home device. Put simply, it is composed of sensors, microprocessors, wireless radio components paired with an Application Specific Integrated Circuit (ASIC). Sensors capture your voice (the data) when you “speak to it”, the ASIC is the program that analyze your request and trigger the according “response” by communicating with other devices thanks to wireless radio components. Pretty simple presented that way! The point here is to present the broad range of applications it could have! By extrapolating it to a factory or a warehouse for example, there is a lot of potential for connecting objects to each other in order to automate a response based on data collected, or providing stakeholders with access to data that would help driving better decisions.

Another important point to consider is how these “smart objects” actually work. The rule of thumb for IoT devices is to be designed with the following 3 characteristics:
  1. It operate on low power.
  2. It uses low bandwidth.
  3. It works on a mesh network (every objects can “talk” to each other and “hear” each other)

The reason why these 3 characteristics are important is that it increase the range of capability of an IoT device in terms of life time (battery can last up to a decade) and range of communication (anywhere from 30 feet to more than 300 feet).

Now that the background of IoT technology and how IoT devices work, let’s take a closer look at how it could impact the supply chain industry. IoT applied to the supply chain is forecasted to have the most potential for innovation. From warehouse management to logistic, the range of application is wide and the benefits of it can significantly improve operational efficiency. For example, sensors on warehouse shelves could detect in real-time a resource consumption and trigger an automatic order for refill, with limited human intervention. A little bit like the new concept of Amazon Go, or the smart grocery shop, where IoT devices detect what items a client takes home and automatically make the payment, without human intervention. This concept would allow a company to reduce significantly the amount of time needed for a given task, reduce the risk of shortage, by ultimately optimizing its supply-chain processes. All that using devices designed for minimum maintenance needs, as explained in the previous paragraph.

In summary, IoT technology improve communication by providing real-time data to any who involved in the supply chain process. This new real-time data availability will allow internal and external stakeholder to fill communication gaps and drive faster and more efficient decisions. In other words, today’s new technologies are opening opportunities to redefine processes through innovation. IoT is showing tremendous potential for both customer and industry applications. A little bit like when computers were introduced in the market! A piece of advice: stay tuned with IoT!
As a strategic sourcing and procurement consultant, I have experienced first hand the importance of understanding your stakeholders. All too often, procurement groups are simply engaged to get the lowest possible price - and while this may simply do the job in certain categories, it doesn't always apply in more intricate categories such as IT and Marketing. When it comes to this area of spend, simply getting the lowest priced product for service doesn't appeal stakeholder groups or address the needs of the department. 

Understanding your sourcing requirements and your stakeholders requires communication and research - and in the case Event Sourcing, participation. I personally and highly recommend, attending the Client’s or stakeholder's event that will be going through a sourcing initiative, especially those that are more large scale in size, whenever possible. It is imperative to understand the breadth, size, purpose, culture and message of the event to properly source this type of category. Event sourcing not only takes into account the bottom line and long item lists, but it includes creating a customized an event look and feel, and ensuring the message of the event is filtered through to the audience.  

I have attended multiple corporate Annual Meetings over the last few years as a direct employee of the company and also has an attendee for sourcing purposes. As I am currently sourcing a likewise event, with an attendance of over 5500 employees, I was lucky to not only attend the event myself, but invite the alternate suppliers bidding on the event; this strategy is usually not accepted by the client, but in this case I was lucky enough to detail the importance of their attendance. The alternate supplier’s attendance was imperative to the sourcing processing for the following reasons:
·       Breadth, scope and size of the event and rooms/space utilized for event execution
·       Look and feel of the décor, set-up and staging
·       Creative and customization requirements
·       Attendance size
·       Production and A/V needs and requirements
·       Meet with the Event Manager/Coordinator
·       View Floor plans and production schedules
·       Understand company culture and importance/sensitivity levels of the event
Post the attendance of the event, not only was the incumbent pleased with the first step of the sourcing process, but each alternate supplier was very thankful in having the ability to see the event first hand as well as obtain business requirements, scope of work and necessary floor plans for bidding purposes.
On my side of the business as the RFx distributor, it was very insightful to hear the questions being asked, the needs to properly bid out a large event and have the ability to answer any of their questions. Also, allowing the alternate suppliers and myself to attend the event, it provides everyone the ability to view all of the tangible and intangible aspects of the event; therefore ambiguity of the event is taken out of the equation. On my end, this helps with supplier scoring and review and removes much of the back and forth that can and will happen. This also removes the variability of each supplier making numerous assumptions and keeps each supplier on an even playing field.
Overall, explaining the importance of not only your attendance but the alternate supplier’s attendance at the event is imperative for an event that is culture and message heavy. This, at times, may be a hard ask, but detailing the reasons as to why alternate supplier attendance is important will make the supplier scoring, selection and negotiations a much smoother process for all parties involved.
So we’ve just about done it. We’re a couple of weeks away from being able to say we survived 2016. We survived the loss of Bowie, and Prince, and Leonard Cohen. We survived what seemed to be a never-ending presidential campaign and roughly 420,000 political television ads. We survived purported Russian hackers, and Tom Brady being suspended, and Facebook announcing to the world that we were all dead.

In the I.T. strategic sourcing and procurement world, we stared down an uncertain economic and business environment and saved our companies and clients millions of dollars through category management best practises, consolidating support teams where it made sense, managing software assets and keeping license renewals at 2015 levels. We’ve negotiated every contract to make sure SLAs were strong, and enforceable, and advantageous to the business. We’ve also continued the SRM practice with our strategic IT vendors to ensure that overall governance is strong, both vendor and company have a clear understanding of the strategic and vision for the partnership.

Because strategy and vision is what we do. Yes, we can (and should) look back and reflect on our successes and challenges over the past year, but real value comes in the planning and execution of the efficiency and savings goal for the upcoming year.

So what are some of the things we can focus on in Information Technology in 2017 in order to reduce costs while maximizing business value?

First things first, let us remember the core principles that have driven cost optimization in the past and what continue to do so:
  • Simplicity
  • Transparency
  •  Discipline
  •  Agility
  • Accountability

If an organization believes in those five principles, getting additional savings across the business can be achieved.

So let’s take a close look at the framework that can be used to continue cost optimization in 2017. We’ll go in order from “easier” to “harder”.

Reduce Unit Costs for IT services and delivery – In short, keep software and support costs as close to 2016 levels as possible. Competitively bid project work for development and system implementations. Focus on end user computing costs by virtualizing desktop/laptop PCs and investing in high-end hardware.

Keep Consolidating – Look at the organization’s major domains and determine where consolidation can occur. Nearshore or offshore support and services where it makes sense.

Rationalize the application portfolio and simplify the I.T. ecosystem – Invest or improve upon the organization’s Software Asset Management system. A lack of good asset and contract insight equals higher costs. Additionally, during challenging economic times, software companies will look to perform compliance audits. Remember, with portfolio rationalization brings corresponding infrastructure savings as well.

Use IT to do business better – Invest in the cloud to improve customer experience, reduce on-site hosting costs, and create more efficiencies in service delivery.

Finally, since we like to think beyond 12 months at a time, we want to take a look at the creation of an IT Shared Services organization. This unit can build upon the core competencies I mentioned earlier. To be clear, there is no immediate savings by standing up a Shared Services office, but over time (usually 2-3 years) through leveraging the economies of scale, building an enterprise philosophy across the business to drive further hard and soft dollar savings, and bridging the divide between various corporate divisions and business units, a company can reduce its I.T. spend by about a fifth.

Here’s to wishing everyone a Happy Holiday season and a prosperous 2017!